Report: Independent producers leading growth in US oil and gas reserves

By Ryan Holeywell | Houston Chronicle

Published 12:29 pm, Thursday, June 26, 2014

HOUSTON — U.S. oil and gas reserves increased 9 percent last year, according to a newly released analysis, and almost all of it was due to independent producers — not major, integrated oil companies.

The report by audit firm EY analyzed data reported by the 50 largest publicly traded companies based on their 2013 end-of-year reserve estimates. It analyzed proved reserves which, according to federal finance standards, are reserves that companies plan to drill within five years.

U.S. oil reserves increased by 2.1 billion barrels last year to nearly 25.4 billion, according to the report. That figure marks a 52 percent increase since 2009.

The gains were attributable almost entirely to the work of independent producers — companies only involved in exploration and production, with no refining business. Those companies, such as Anadarko Petroleum Corp. and Devon Energy, are the most prominent actors in the country’s shale plays.

Companies with integrated refining operations, such as Shell Oil Company and Exxon Mobil Corp., face challenges when it comes to finding and pumping oil and gas in shale regions, said Herb Listen, U.S. oil and gas assurance leader at EY.

“In shale plays, it’s important to have economies of scale,” Listen said. ”What we found is independents and large independents are a bit more nimble at being able to get it, acquire the acreage, and build their footprint,” Listen said.

The report also found that as natural gas prices have increased, so too have gas reserves. Gas reserves also were up 9 percent in 2013, to more than 178 trillion cubic feet.

That’s significant, since in 2012 there was a dip in natural gas reserves, as companies shifted their focus to more profitable oil production and revised reserve estimates downward 28 trillion cubic feet over the course of the year.